A new report from the Mortgage Bankers Association (MBA) shows that weekly mortgage applications are on the rise. As interest rates have continued to drop, more and more homebuyers are entering the real estate market with confidence.
The Rise in Weekly Mortgage Applications in the US
The aforementioned report looked at the week of September 1st to September 6th and found that, according to the Mortgage Bankers Association’s seasonally adjusted index, the total volume of mortgage applications rose by 2% from the previous week. This is actually a whopping 69% increase from the same week last year when interest rates were much higher.
For 30-year fixed-rate mortgages with conforming loan balances of $484,350 or less, the average contract interest rate was 3.82% for the week. That is a week-over-week drop from 3.87%. Points also increased from 0.34 to 0.44 for mortgages with a 20% down payment. This includes the origination fees.
Mortgage applications for home buyers specifically had a weekly increase of 5% and were 9% higher than at the same time in 2018.
Experts say the rise in buyers in the real estate market can be attributed not only to the dropping mortgage rates but to a very slow spring and summer season for property sellers. Real estate demand, which is usually high during these seasons, will now be particularly high in the fall real estate market it would seem.
At the same time, inventory is higher than is typical for this year (in certain areas in the US). So even though more property and homebuyers are entering the real estate market, they will have options and won’t rush to close on just any property for sale. In other words, sellers will have to price their properties right or lose out on getting offers this time of year.
The Slight Rise in Refinance Applications
While mortgage applications rose significantly, the same phenomenon was not witnessed for applications to refinance even though interest rates are lower. There was only a 0.4% increase compared to the week before, according to the same report. This is likely because potential refinancers prefer to keep observing as rates drop even lower before taking advantage.
Still, when compared to the same time last year, refinance applications were up an impressive 169%.
Joel Kan, an MBA economist, commented that:
Refinances were essentially unchanged, but August overall was the strongest month of activity so far in 2019.
However, with rates climbing back up towards the end of the week, experts say the refinancers will start making their moves again and applications are likely to get a boost soon.
Real Estate Investment Opportunities
As a real estate investor, the fall real estate market will hold many opportunities for you.
If you own an investment property and are looking to sell, now you will find high demand, perhaps higher than you did in the summer (depending on your location). Just be sure to check recent real estate comps and price your property correctly.
List your property for sale in the Mashvisor Marketplace and easily look at comp data.
If you want to buy an investment property, take advantage of low rates and the rise in inventory. Prepare for competition by getting a pre-approval and having financing in place.
Now is also a good time to refinance your rental property and perhaps use the cash as a down payment for a new one.
Whatever your current stance in the real estate market, September is looking like a good month to make some moves.
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